Bookkeeping for Etsy and handmade sellers
Handmade income arrives as marketplace payouts net of fees, while materials, shipping labels and ads are paid separately. Record gross orders, fees and shipping so the payout reconciles and the true margin of each product is visible.
Best for: Etsy and online handmade sellers with a small team or a solo shop.
Reviewed
Gross orders
Reviewed
Marketplace fees
Reviewed
Materials
Reviewed
Shipping labels
Where Etsy and handmade seller books usually go wrong
- Payout deposits booked as sales: fees, ads and refunds disappear inside the net amount.
- Materials bought for many products with no tie to what was sold.
- Offsite ad fees and shipping label costs treated as one expense, so product margin looks higher.
- Craft fair and wholesale sales mixed with online, hiding which channel works.
- No record of stock on hand, so cost of goods is guessed at year-end.
- Gifts, samples and giveaways not recorded, so product cost is understated.
- Etsy fees, ad spend and shipping labels netted out of payouts.
What the books need to show
Industry-specific accounts and categorization, with the reporting scope agreed before work starts.
Marketplace sales
Record gross orders from the shop report and reconcile payouts to the bank.
Fees and ads
Track listing, transaction and offsite ad fees as costs.
Materials and supplies
Keep materials separate from finished goods with a stock review.
Shipping
Record labels and postage against orders, including insurance.
Craft fairs and wholesale
Separate in-person and wholesale sales from online.
Returns and refunds
Tie each refund to the order it came from, including any returned shipping.
Reports a seller can use
- Gross sales, fees and refunds by month.
- Materials and shipping cost by product line.
- Sales by channel: online, fair, wholesale.
- Stock and materials on hand.
- Giveaway and sample log by month.
- Fees, ads and shipping by month.
A simple, predictable process
From kickoff to your first clean close, here is exactly what happens.
Download shop and payout reports
We start with the shop's sales and payout reports for the last quarter.
Record gross orders
Fees, ads and refunds are separate lines so margin is visible.
Tie costs to products
Materials and shipping are grouped by product line where records allow.
Close with stock review
Statements arrive with a stock and materials check and open refunds.
Illustrative example
A shop receives a payout smaller than the month's orders because of fees, refunds and ads. Recording the gross lines shows the real cost of selling on the marketplace. This is an illustration of the method, not a customer case or a guarantee.
Etsy and Handmade Sellers bookkeeping — your questions
Why not just record the payout?
Gross records show fees and refunds so margin can be judged.
How do I handle sales tax?
Marketplaces may collect it. Confirm what applies with your accountant.
Do I need inventory tracking?
Handmade stock and materials still need a month-end review.
Is this a hobby or a business?
That is a tax question. Keep records either way and confirm with your accountant.
Is this too small for a bookkeeper?
If you are filing taxes and want a clear margin, monthly books help even for a small shop.
How do you handle shipping charged to customers?
Shipping income and label cost are tracked separately so the net is visible.
Can you handle several shops?
Yes. Each shop gets its own income line.
Can you reconcile Etsy payouts?
Yes. Each payout is matched to the bank and broken into sales and fees.
How do you handle materials?
Materials are tracked by product line where possible.
What affects the bookkeeping quote for Etsy and handmade sellers?
Plans start at $229/mo. Transaction volume, account count and the records and reporting needed determine the agreed scope and final quote. Catch-up work is discussed separately.
Customers slow to pay?
Our in-house collections team calls and emails customers who owe your company money, so you can stay focused on the work.